First Time Home Buyers Tax Credit Guidelines have been announced. Below you
will find the highlights of the program
* Seek advice from a professional tax advisor for specific tax calculations and
timing for claiming the tax credit.
Should you need any assistance or simply have a question, feel free to Contact us at sharonandgreg@Century21.com
FEATURE |
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FIRST-TIME HOMEBUYER FEDERAL INCOME TAX CREDIT: EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009 |
Amount of Credit |
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The amount of the homebuyer federal income tax credit is the lesser of 10% of the cost of the home bought or $8,000. |
Eligible Property |
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Any single-family residence (including a condo, co-op, or townhouse) may be an eligible property under the homebuyer income tax credit, provided it will be used as the homebuyer's principal residence. |
Refundable |
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This homebuyer income tax credit reduces income tax liability. The $8,000 tax credit is a clean refundable credit, unlike the one that was passed last summer, which required a repayment. If you qualify as a first-time buyer (i.e., haven't been a homeowner in the past 3 years), then you can claim the $8,000 to reduce your tax burden. If the $8,000 is greater than the tax you owe, then you will get a refund check for the difference. Example: you owe $2,000 in taxes on April 15, 2010. But if you bought a home before the stimulus expiration on Dec. 1, 2009, then you will get a tax refund check for $6,000 from the IRS.* |
Income Limit |
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In order to be eligible for the homebuyer income tax credit in full, the homebuyer can have an annual adjusted gross income of no more than $75,000 ($150,000 on a joint return). A homebuyer with an annual adjusted gross income above that level and up to $95,000 ($170,000 on a joint return) is eligible for a reduced tax credit. |
First-time Homebuyer Only |
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The homebuyer income tax credit is designed for first-time homebuyers, which means the homebuyer (and/or the homebuyer's spouse) can not have owned a principal residence in the 3 years prior to purchase of the eligible property. |
Revenue Bond Financing |
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Repayment |
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There is no repayment of the homebuyer income tax credit by the homebuyer. |
Recapture |
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However, if the eligible property is resold within three years of purchase, the entire amount of homebuyer income tax credit is recaptured on the sale. |
Effective Date |
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The First-Time Homebuyer Federal Income Tax Credit is effective for purchases on or after January 1, 2009 and before December 1, 2009. This guide reflects a modification from the First-Time Homebuyer Federal Income Tax Credit, which remains in effect for homes purchased by eligible homebuyers between April 9, 2008 and Dec. 31, 2008. |
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